Who Will Take GM's Place in the Dow?

by: Mike Havrilla November 11, 2008 | about stocks: AAPL / ABT / AMGN / CSCO    

Mike Havrilla

About this author:
  • Profile & More Articles
  • Visit: Blog Site
  • Visit: RSS Feed
Become a Contributor Submit an Article
  • Font Size:
  • Print

While the fate of General Motors (GM) as a company is being debated by legislators and others, investors would agree that GM will be removed from the Dow Jones Industrial Average as the common stock faces the likely prospect of heading to zero despite efforts for a bailout of workers and suppliers. Some companies to consider as a replacement for GM include:

Abbott Labs (ABT) is a consistent performer with diversified healthcare operations, including pharmaceuticals, diagnostics, medical nutrition products, and medical devices/stents. Over the past decade, ABT has consistently raised its dividend and posted a stock price gain of about 17% while the Dow is down 1% and the S&P 500 is down 19%.

Amgen (AMGN) would be an ideal candidate for the initial biotech component in the Dow since its larger rival Genentech (DNA) is majority-owned by Roche (RHHBY), which is looking to buy the remaining stake it does not already own.

Apple (AAPL) has emerged as the technology bellwether and stock market leader, soaring over 900% in the past 10 years and its iPhone is outselling Motorola (MOT) and Research In Motion (RIMM) while its Mac and iPod brands continue to gain market share.

Cisco Systems (CSCO) is closely followed for its guidance on technology spending as the global leader in networking and internet infrastructure.

Related Articles

This article has 9 comments:

  •  
    Nov 11 02:39 PM
    Apple would be a great Dow component.. They will outgain the majority of the market in the coming years.
    Reply | Link to Comment
  •  
    Nov 11 02:49 PM
    Lets see, which company can we use to make the DOW look better than it really is! Hmmm, I know! Apple! Yeah, Apple! That's it! That's the ticket!
    Reply | Link to Comment
  •  
    Nov 11 03:48 PM
    no not Apple. Anyone but AAPL. Its a great stock but not in the Dow. Look what happened to Msft when it joined the Dow. No AAPL in the dow.
    Reply | Link to Comment
  •  
    Nov 11 04:37 PM
    Cisco (CSCO) should be added the DJIA. It is about as close to "Industrial" as you can get with any tech firm. They will be selling the gear that powers the Internet for a long time to come. Their performance, and outstanding level of financial transparency should put them into serious consideration.
    Reply | Link to Comment
  •  
    Nov 11 08:05 PM
    As much as I'd like to see Apple in the Dow, it's going to be Cisco.
    Reply | Link to Comment
  •  
    Nov 11 09:00 PM
    MSFT's problems have nothing to do with the DJIA - In fact the DJIA helped the stock price of this 20th century company.


    On Nov 11 03:48 PM poohead wrote:

    > no not Apple. Anyone but AAPL. Its a great stock but not in the Dow.
    > Look what happened to Msft when it joined the Dow. No AAPL in the
    > dow.
    Reply | Link to Comment
  •  
    Nov 11 09:07 PM
    Wall Street will definitely choose Cisco. In WS's opinion, Cisco makes really serious business devices, while Apple is still looked upon as merely a high-tech toy company.
    Reply | Link to Comment
  •  
    Nov 12 10:10 AM
    What is your rationale for "investors would agree". It has to be an industrial stock. Who is better than GM in that regard? If you take it out you are not really measuring the economy. Apple is not a manufacturer but an integrator.
    Reply | Link to Comment
  •  
    Nov 12 03:24 PM
    None of these are industrial stocks. Maybe the DOW should be retired as we obviously do not have much of an industrial base left in the U.S.
    Reply | Link to Comment
More Comments on ABT ยป
Top Rated Comment Streams:

Numbers are net rating-

See all Top 100 »
More by Mike Havrilla

Investment Resources
Money Management
Research
Seeking Alpha provides these ads as a service to its leading contributors
Articles on related themes
Drug Manufacturers
Biotech Research
Cell Phones
Digital Cameras & Printing